May 29, 2022


Accounting + Finance Blog

Can We Go Cashless In Nigeria


Some years ago trading was carried out using trade by barter. We grow to to meet coins/money as a means of trade. The reasons for the adoption of coins/money was due to the fact that there were the disadvantages of trade by barter. This was eliminated with coins/money. But using cash also had it’s own disadvantages. Better alternative should be able to eliminate them. In looking for another alternative came cashless economy/society. So what is a cashless economy?

Cashless Economy/Society

A cashless economy make use of digital transactions thereby reducing dependence on physical cash. Digital transactions involve credit cards, charge cards, internet banking as well as mobile banking. Adopting this new means of trade should be able to correct anomalies with physical cash. This was exactly how physical cash eliminated some problems with trade by barter that lead to it’s wide acceptability.
The drive by Central Bank of Nigeria (CBN) have taken several dimensions. This could be the major reasons why a lot of angry bank customers fingered CBN as the cause of long cues at Automatic Teller Machine (ATM) as well as inside their various banks in the country some few weeks back. The explanation from the authorities says that CBN did not print money last year. So it was lack of physical cash. This is exactly what is happening in India toady.

Why Shift To Cashless Economy/Society In Nigeria

For some years now, the Central Bank of Nigeria have been driving for a cashless economy. The reasons given if can be considered as genuine as it affects positively both the rich and the poor, businessmen and salary earners and all persons from all works of life. 

  1. When there is less physical cash in a society, there tends to be less crime. 
  2. The high risk involve in moving about going to places with hard money is remove. 
  3. This move if fully implemented will curb political corruption.
  4. Banking will improve as there is going to be a reduction in banking cost.
  5. counterfeit and soiled money from will be a thing of the past.
  6. No delays and queues at ATM stands and inside banking halls
  7. It will save the economy since the cost of printing a note is about N4. This can drain the economy if one billion note are to be produced in a year, the cost of minting will be four billion.

Risk Factors And Drawback To Consider As Nigeria Shift To Cashless Economy

  1. Since money will now be in digital form, cyber hack will increase. According to a source, the    security of transactions in Nigeria is about 40% vulnerable to cyber attack as players in the industry are yet to adopt the security device/software necessary for 100% security. Only one    player is fully equip to handle cyber attack. 
  2. The entry of mobile phone in Nigeria some years back have truly increase penetration of internet network in places where it was difficult to get internet. But there are still locations even close to urban areas that still lack these basic facilities to run on a cashless economy.
  3. To be fully functional, a person must obtain at least a feature phone to carry out transactions. The cost of owning one can be a major draw back in actualizing this dream.
  4. The illiteracy level in Nigeria is still high. Worst still computer literate are scared of trying out     these new models of transactions. This could be due to the fact that they are aware of the level of security.

Over All Score

For now the old people will find it difficult to use these new means of technology. As for the young, adopting it will save us time, money and energy. This drive will truly benefits all in the society as well as the government. Making cashless transactions free should be considered by the government as  a way of encouraging cashless transactions. This will at the tail end bring enormous benefits like what Sweden is enjoying now; 80% of transactions are cashless, that is 4 out of 5 transactions are cashless. Well am looking forward to it.
Copyright 2020 @ Myfinancein